"There is a notion that during a crisis that gold ... is a safe haven," independent fund analyst Peter Loach said yesterday in an interview.

In January, the price of gold rallied, and industry observers predicted better times for the yellow metal. During the World Economic Forum meeting last week in Davos, Switzerland, Barrick Gold Corp. chairman Peter Munk suggested that gold will likely hit record highs in U.S. dollar terms.

"Gold is at record levels in every currency except dollars," he said. "Even within dollar terms, it is within a few percentage points of an all-time high, at a time when all the other major commodities are falling."

Precious metals funds fall into one of the few categories that have historically recovered their losses when held for the long term, Mr. Loach said.

The sector was very weak in 1997 and 1998, but precious metals funds made up for the losses in 2001, 2002 and 2003, he added.

"They do provide a buffer [in a portfolio.]"

Precious metals funds, he said, can have a weak or negative correlation to the broader stock market and the natural resources sector.

Financial services funds, meanwhile, took it on the chin last month because their stocks are "at the heart of the [global credit] crisis," independent fund analyst Dan Hallett said.

Most financial services funds also tend to have more foreign stocks, and that is "where most of the damage has been done," Mr. Hallett said. "Canadian financial stocks have not been hurt to the extent that U.S. and some foreign firms have."

For example, the AIC Global Advantage Corporate Class lost 17 per cent in January. It owned stocks such as Hartford Financial Services, HSBC Holdings PLC and Prudential Financial Inc., which have been beaten up.

Real estate funds were also battered last month.

Most of these funds are invested in publicly traded stocks - whether in real estate investment trusts or operating companies - outside of Canada, and they have fallen substantially, Mr. Hallett said.

With the U.S. subprime mortgage crisis, there is "certainly some fear that what has been a residential issue to date will spill over into the commercial market," he said.

Investors Global Real Estate Fund, which lost 15 per cent in January, owned U.S. stocks like Boston Properties, Simon Property Group and Ventas Inc.